Supreme Court Ponders Power Plants and Fish Protection

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WASHINGTON, DC, December 4, 2008 (ENS) - The U.S. Supreme Court is wrestling with the difficulty of valuing fish and aquatic organisms with little or no commercial worth, hearing arguments in a legal dispute over what steps older power plants should take to limit water use and minimize environmental harm.

In oral arguements Tuesday, the Bush administration urged the court to allow federal regulators to use cost-benefit analysis when crafting such requirements - a view rejected by a lower court last year.

A majority of justices appeared skeptical of the Bush administration's arguments, but seemed keen to find middle ground that would allow for some considerations of costs and benefits.

The legal issue rests on the interpretation of a provision in the Clean Water Act that authorizes the U.S. Environmental Protection Agency to require power plants install "the best available technology for minimizing adverse environmental impact" from cooling water intake structures.

The environmental concern is a serious one. U.S. power plants pull more than 200 billion gallons of water a day from reservoirs, lakes and rivers to cool machinery or, in the case of nuclear power plants, to cool reactors. The practice kills large numbers of fish and other aquatic organisms that are drawn into intake pipes along with cooling water.

But the economic concern also is considerable. Newer power plants are constructed with closed-cycle cooling systems that alleviate much of the concern, but retrofitting older plants can be costly.

Industry groups contend broad technology requirements for all older plants could force some to close and others to raise electricity prices, all for environmental benefits unequal to costs.

Heeding that concern, a rule finalized in 2004 by the Bush administration allowed some 550 older plants to chose among several alternatives to reduce environmental harm from cooling water intake structures, allowing them to avoid installing the best available technology if the costs outweighed the benefits.

Six states and a coalition of environmental groups, led by Riverkeeper, sued, arguing the Clean Water Act does not allow EPA to conduct cost-benefit analysis when crafting the cooling water intake rules.

The U.S. Court of Appeals for the 2nd Circuit agreed with that view and struck down the regulation, prompting the appeal to the Supreme Court by the Bush administration and several utilities.

U.S. Deputy Solicitor General Daryl Joseffer told the Supreme Court justices on Tuesday that the statute's language is ambiguous and gives the EPA deference to balance costs and benefits.

"For more than 30 years, EPA has construed the Clean Water Act to permit it to consider the relationship between costs and benefits in setting limits on water intake," Joseffer said.

When lawmakers wrote the statute in 1972, they understood "that consideration of cost and benefits was not incompatible with the application of a best technology standard," he added.

But several justices challenged that view and wondered how EPA could fairly weigh the costs and benefits of the technology versus fish and aquatic organisms.

While the costs of the technology are clear, Justice David Souter said, the value of the fish and aquatic organisms being protected is not.

Given that uncertainty, Souter added, the application of cost-benefit analysis would seem to unfairly favor industry and "basically eliminate the whole technology-driven point of the statute."

The concern, said Justice Ruth Bader Ginsburg, is how to compare "things that aren't comparable."

All cost-benefit analyses are difficult - even "ones which people do in ordinary life," Joseffer replied. "When I decide whether to buy a TV for this amount or a more expensive TV for a different amount, I don't know exactly how in my head I quantify that, but I do."

Chief Justice John Roberts rejected Joseffer's hypothetical and also seemed skeptical of the government's argument.

"If you told somebody that you were going to buy the best TV available nobody would think you meant that you were going to buy a very cheap TV because, considering the costs and benefits, that was the best one," Roberts said. "They would think you are going to get the fanciest TV you could."

Justice Anthony Kennedy said he assumed that best available technology meant "the most rigorous of standards" set by the Clean Water Act and questioned where it suggested cost considerations for the cooling water intake rules.

Joseffer responded that the EPA does not think the best available technology language is stricter than other standards, such as the Clean Water Act's pollution discharge standards.

Those standards require cost-benefit analysis and call for elimination of discharges compared to the cooling water intake provision's goal to minimize environmental impacts, he explained.

"There is no reason to think Congress would want greater protection for fish through intake structures than for people through the discharge of pollutants," Joseffer said.

Justice Antonin Scalia agreed, saying it "seems ridiculous" to allow cost-benefit analysis for pollutant discharge standards "where human health is at stake, and yet to forbid it in this intake situation when you were just talking about the snail darter."

Arguing for the environmentalists, Georgetown University law professor Richard Lazarus said the statute clearly does not give EPA authority to weigh costs against benefits for the intake rules.

But that interpretation would not lead to "the kind of absurd circumstances" the Bush administration and industry predict, said Lazarus, because the "plain meaning" of the Clean Water Act guards against the possibility that "a regulated facility would have to spend millions or hundreds of millions or billions of dollars to protect just a few fish."

If a technology is too costly, he explained, it is essentially not be the best available technology, as Congress meant availability to mean both "technologically available and economically available."

That reasoning baffled Justice Scalia.

"If I look in the real estate page of the "Washington Post" on Sunday and I look for the best house that is available, the best house that is available might cost $50 million," Scalia said. "Now, that would be available to me. I couldn't afford it, but it would be available. You wouldn't say I can't buy the house because for me it's not economically available. I might say it's not economically feasible, it's not economically possible, but it's not economically available? That's weird."

Lazarus responded that "it may be weird … but it is not anything that has ever been disputed in the interpretation" of the Clean Water Act.

Justice Samuel Alito also questioned Lazarus' interpretation and wondered if the EPA could consider the impacts of increased electricity costs to consumers.

"If the effect of achieving a small gain in protecting fish is to increase electricity costs 10 times, is that something that cannot be taken into account?" Justice Alito asked.

The EPA can consider whether costs can be "reasonably borne by industry," Lazarus replied, but cannot hold off on requiring installation of the best available technology because it thinks the benefits are not worth the costs.

Justice Stephen Breyer, a member of the court's liberal wing, honed in on the intent of lawmakers who crafted the 1972 law and sought some middle ground that would allow the EPA to consider costs and benefits without a strict comparison.

"As I read it, it says: Of course you can't avoid taking into account costs, but don't do it too much," Breyer said. "And, therefore, you would say: 'Don't apply one of these big formal things when you reach your final goal. There are other ways of getting there. Of course, see that it isn't absurd.'"

For 30 years - prior to the 2004 rule - the agency "has had a way" to do that, Breyer added, as it has considered whether costs were "grossly disproportionate" and unreasonable to industry.

"Why not let sleeping dogs lie?" Breyer asked. "Let the agency take it into account the way it's done it to prevent absurd results, but not try to do it so that it's so refined you can't even take account of what a fish is worth unless they happen to be one of the 1.2 percent that goes to market."

The court is expected to rule on the case next spring.

-- By J.R. Pegg, ENS Washington Bureau Chief

{AES Westover coal-fired power plant on the Susquehanna River at Binghamton, New York. The first unit was built in 1917. (Photo courtesy AES Corp.)}